The U.S. keeps a list of organizations and people who aren’t allowed to get federal funds. Johnson has been on that list since last fall, because the non-profit he founded is under federal investigation. So far, the mayor says, Sacramento hasn’t missed out on a dime. But a legal memo making the rounds at City Hall suggests Johnson’s status could prevent Sacramento from receiving its share of economic stimulus dollars. Yesterday, the mayor said he does not think any federal funds are at risk.

Johnson: “I hate for the city of Sacramento to have this cloud hanging above the city. But I do believe in the not-too-distant future, we’ll have clarity on this particular case.”

In fact, negotiations are under way to work out a settlement. Acting U.S. Attorney Larry Brown says a deal would not involve criminal charges – and would likely include getting the mayor off that federal list.

Brown: “Presumably, that’s what his counsel will want to have assurances about before they would agree to any settlement with our office.”

It’s not clear when a deal could be reached. But Brown says his office wants one soon. After all, he says, he doesn’t want to see Sacramento miss out on stimulus funds either.